Wal-Mart is an RFID usage leader in more ways than one. It is commonly known that they are requiring their top 100 suppliers to tag the inventory they ship to Wal-Mart. Target, the Department of Defense, Tesco and METRO AG have followed suit. Wal-Mart is also a leader in the utilization of RFID within its stores by tagging expensive items and triggering cameras if/when those items physically move to begin a lineage of tracking product movement to prevent theft. This represents a step toward more automated stores. Suppliers implementing RFID to comply with these mandates are well advised to look beyond the mandate into other areas of their business that they can optimize with the introduction of this technology.
Although chips are useless without the corresponding readers, it would be erroneous to think that reader saturation is necessary for effective RFID applications. In a retail setup, for example, only key locations such as entrances/exits and pickup areas are required to generally understand customer and product movement for tactical theft prevention as well as to affect store display, product layout and the myriad RFID marketing uses. The current paradigm of customer identification at the register, when the customer is ready to leave the store, needs to be flipped so that the identification occurs upon entry to the store. Reading the store's frequent shopper card or the more general use credit card from a wallet or purse will serve this function. The current practice develops customer profiles from store activity and demographics - not utilizing the information in real time. That will be an industry challenge. Think of the value that other tags on clothes or various customer purchases could provide to this process.
Over time, supply chain evolution with RFID is expected to reduce traditional supply chain times by half. Out-of-stock conditions can be avoided in sales and medical situations. RFID tagging is necessary when you care about the individual items and not just the category of the item. UPC can work at the category or package level. In the future, it will be common for goods to be tagged both at the item and the package level.
It would be impossible to truly survey the RFID market without mentioning the 800-pound gorilla in the room called privacy. Between the facts mentioned in my October column that every physical item can fit into the electronic product code (recently confirmed as the RFID standard in China) and that, by default, any reader can understand any tag, people get nervous about RFID. There is a growing anti-RFID privacy movement. Some call the chips "spychips." This is a complex issue to address, but from a business perspective, one has to take into account these concerns of public backlash and prospective legislation dimensions. Viruses, erroneous and fraudulent message passing (and reading - called "skimming") are being virtually ignored now, but they are obvious future concerns. There are RFID-blocking card holders available with Hello Kitty branding (seriously!).
Architecturally, RFID data is unrecognizable and meaningless without a master product dimension to cross-reference. This is where master data management (MDM) for the product subject area comes into the RFID support information architecture. With RFID, there are obvious immediate actions to be taken upon item/location coordinates such as stopping the thievery, storing the supply chain progress into a database, opening the car door, charging the credit card, displaying a promotion or retrieving the wayward cow.
Once it is determined that a human has been identified, other actions can be customized with the help of the customer master data. Display can take into account customized promotions, for example. The combination of other tagged items can also create customized operational actions, but human beings present the most complex opportunities. U.S. passports now contain embedded RFID chips that carry the owner's personal data and digital photo. Operational actions during passport reads can include border denial and other state necessities.
Because RFID tags constantly send out signals, which are continually being picked up in remote locations usually only minimally equipped to perform rudimentary actions, it is important to carefully utilize the information management constructs of MDM and the data warehouse in supporting the RFID processes. The data concentration process between the tag read and the back office is necessary, but it does introduce latency between the tag movement and the data warehouse.
While the operational actions take place by sourcing the RFID data into an operational data store (ODS)-like structure and combining that with (operational) MDM, the exciting profile management, specifically for customers, will likely still take place in the data warehouse. The data warehouse will receive feeds from the RFID ODS on whatever basis (batch, real time, etc.) is possible and send summarized and actionable profile information back to the MDM solution for use in future customized actions related to that customer. Those actions can take place during the next read of that customer, but they can also be offline, such as a mail promotion or changes in a customer's loyalty status.
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